What is S&OP? Sales and operations planning 101

The S&OP process is a cyclical approach to sales and operations planning that helps businesses align demand with supply, reducing excess inventory costs and minimizing stockouts. It relies on the equal involvement of three key components: people, process, and technology. The process involves five steps: data collection, demand review, supply planning, pre-S&OP meeting, and executive meeting, where departments come together to reconcile plans and make adjustments. To ensure success, businesses should define metrics, use up-to-date data, determine an internal owner, run through "what-if" scenarios, and find a workflow that fosters collaboration. Ultimately, a purpose-built S&OP platform is necessary for large operations, offering features such as KPI tracking, reports, collaborative planning tools, forecast calculations, scenario planning, and app integrations. By implementing the S&OP process, businesses can increase profitability, shorten the planning process, enhance cross-functional collaboration, deliver on customer needs, improve production stability, optimize production capacity, and drive better decision-making.

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